Yahoo!’s China Assets On The Block?

Yahoo!’s summary firing of its chief executive Carol Bartz could advance the sale of its China business, as part of a dumping of Asian interests to reshape itself for sale or a new life as a niche Internet media company. Yahoo! owns a 43% stake in Alibaba Group, Jack Ma’s e-commerce group.

Blood between the two had been bad even before Alibaba last year transferred ownership of its online payments service, Alipay, to a company controlled by Ma with apparently little or no advance notice to the U.S. company, and certainly without any agreement on how any monies realized would be divvied up. (Alibaba’s argument is that the transfer was a necessary technicality to comply with domestic law.) Bartz got only $2 billion in compensation from Alibaba, and that only with a struggle typical of her fraught relationship with Ma. Yahoo! shareholders considered that short change.

Ma, we suspect, would be more than happy to buy back Yahoo!’s stake in his company, and free himself of what now must be regarded as a legacy media company that is struggling to compete with the new social media — unless he sees a madcap opportunity for a maverick U.S. play with a reverse takeover, though taking on Google and Facebook in the U.S. is a different proposition from doing so in China.

Yahoo!’s new chief executive, whoever that turns out to be, may well be a willing seller, and of its 35% stake in Yahoo! Japan, in which Softbank is a partner as it is in Alibaba. Even now, the two stakes, which account for more than half Yahoo!’s market cap, could fetch $9 billion, at least from a non-U.S. buyer; an American company might see the need for a China- or Ma-hassle discount.

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